Malik has taken his demand for compensation to court, saying he spent four years in custody before he was acquitted in 2005 and that the media continued to vilify him after that.
But Len Doust said Tuesday the Crown had overwhelming evidence against Malik, although it was unable to prove its case beyond a reasonable doubt.
"It's not unfair or unjust to have him pay his own costs," Doust told B.C. Supreme Court Judge Ian Josephson, who acquitted Malik and his co-accused of mass murder and conspiracy charges related to a pair of June 1985 Air India bombings that killed 331 people.
Doust said a not-guilty verdict doesn't mean someone is innocent of a crime and that people are awarded costs only in extreme cases, such as when the Crown violates their charter rights.
Malik's lawyer, Bruce McLeod, said the case against his client fell markedly short of the criminal standard.
He argued the Crown was under a high degree of public pressure to pursue the unique case and based it largely on the testimony of a witness who had a vendetta against Malik.
Doust said the evidence of the witness, whose identity was protected in court, was presented as the 16th of 19 separate pieces of evidence at the bail hearing.
McLeod said the case is remarkable not because it involved 39 lawyers or that a special high-security courtroom was built for the proceedings, but because "the Crown unwittingly became a party to (the witness's) project to get back at Mr. Malik."
But Doust said it's not unusual for a defendant to spend years behind bars before a trial can be scheduled and that the multimillionaire hardly qualified for legal assistance in the lengthy proceedings.
"Legal aid is not available to people like Mr. Malik because it shouldn't be," he said.
Doust noted Malik and his wife posted $11.6 million as their net worth at the bail hearing in 2000, suggesting he obviously had the money to pay his team of lawyers.
Less than a year later, however, Malik made a court application saying he had no money to fund his legal defence, although a judge ruled that he, his wife Raminder, and their children colluded in hiding the family's enmeshed assets.
In April 2011, the Supreme Court of Canada granted the B.C. government access to evidence that was seized in a bid to prove Malik can afford to pay his legal bill.
Malik has also pointed to wiretap evidence erased by the Canadian Security Intelligence Service, including recordings of Talwinder Singh Parmar, the alleged mastermind of the Air India plot, as unacceptable negligence in the case.
However, Doust said that while the Crown conceded negligence by the agency, that didn't mean it should have stopped prosecuting the terrorism case.
"Just because there was a charter violation doesn't mean the Crown should abandon ship," he said.
The Crown has maintained the plot to bomb government-owned Air India planes was hatched by B.C.-based Sikhs, who sought revenge against the Indian government after the army was ordered to storm the Golden Temple in Amritsar a year earlier.
Malik and his co-accused, Ajaib Singh Bagri, were acquitted nearly two years after the case began in April 2003.
The Crown said a suitcase bomb loaded onto a plane at Vancouver International Airport before being transferred to Air India Flight 182, which exploded off the coast of Ireland, killing 329 passengers and crew.
That was about an hour after a bomb destined for another Air India plane exploded prematurely at Tokyo's Narita airport, killing two baggage handlers.
Inderjit Singh Reyat, the only man convicted in the bombings, testified for the Crown at Malik and Bagri's trial.
He was convicted of perjury, but appealed the ruling.